The View

How Covid-19 has boosted Asia’s luxury residential sector

Name: How much will a lack of tourists at the Tokyo Olympics cost Japan?
Uploaded: 2021-07-27T01:15:18.000Z
Duration: 3 min 22 s
Description: How much will a lack of tourists at the Tokyo Olympics cost Japan?

The economic response to the pandemic has inflated asset values and encouraged the wealthy to park their money in property

Domestic buyers have stepped up to fill the gap as cross-border transactions fall amid lockdowns and travel restrictions

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A man rides a tricycle past an advertising poster for luxury apartments in Beijing in July 2016. Unlike in the West, the pandemic has accentuated the appeal of urban living in Asia, a crucial driver of the region’s economic growth. Photo: Reuters

Nicholas Spiro

Nicholas Spiro is a partner at Lauressa Advisory, a specialist London-based real estate and macroeconomic advisory firm.

Published: 9:15am, 27 Jul 2021Updated: 9:15am, 27 Jul 2021

South Korea last week reported its highest number of daily new Covid-19 cases since the pandemic erupted, as the nation struggles to contain a surge in infections that has forced the government to put the capital Seoul and surrounding areas under partial lockdown.

In Australia – another country that won international praise last year for suppressing the virus – half the population is back in lockdown as the state of Victoria joined New South Wales in ordering residents to remain within a short distance of their homes.

More worryingly, the Summer Olympic Games, which kicked off in Tokyo last Friday, threaten to become a superspreader event just as Japan – which is already experiencing the weakest recovery among the main developed economies – is on the brink of a fifth wave of infections.

Across the Asia-Pacific region, the combination of the rapid spread of the Delta variant and worryingly low vaccination rates in most countries poses an acute threat to the region’s economic rebound.

Yet, when it comes to the luxury residential sector, the pandemic has turbocharged a market that had already registered some of the sharpest annual price increases globally before the virus struck.

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How much will a lack of tourists at the Tokyo Olympics cost Japan?

Last Wednesday, Knight Frank published its latest prime residential forecasts, showing that Sydney is expected to post the strongest growth in prices this year among 11 leading markets.